Mike Larson, Money and Markets columnist and editor of the Safe Money Report, is out this afternoon. George Lambert, an editor on the Money and Markets team, is filling in. Mike’s regular afternoon column will return on Monday.

The IRS recently announced cost-of-living adjustmentsaffecting pension plans and other retirement-related items for tax year 2015. For example:

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000.

And …

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000.

But will those increases mean anything to many Americans? We think not. Here’s why …

Thirty-four percent of working middle-class adults in the U.S. are not even contributing a dime to a 401(k) plan, an IRA, or any other type of retirement savings plan, according to this recent survey which followed more than 1,000 adults between the ages of 25 and 75 with a median household income of $63,000.

Those who are putting money away for retirement say that they are currently reserving $125 every month. Fortunately most of those surveyed — about 61 percent — say that the savings is not much of a sacrifice. Thirty-eight percent say that this long-term investment is a big sacrifice.

About 55 percent, however, say that they plan to save later since they got a late start on retirement savings.

More than half of non-retirees without access to a 401(k) plan say “it is not possible” to pay bills and “still” save for retirement.

Wells Fargo’s director of institutional retirement, Joe Ready, says, “The main message here is people are putting off saving, and they are losing the benefit of long-term compounded earnings. Kicking the empty can down the road is going to be detrimental to their retirement security. It’s really a problem.”

The worst of it, of course, is that it is not very easy to make the kinds of changes necessary to begin putting money away for savings. However, even just a few dollars a month — in a fair-yielding retirement account — will eventually pay off the kinds of dividends necessary in retirement.

The survey also shed light on several other things: More than 30 percent of the middle class believe they will not have enough money to survive retirement. About 70 percent actually have some kind of savings plan through an employer.

On average, people with access to a 401(k) plan will save ten times more than someone who does not have one.

How have you prepared for retirement?

Are you contributing to a 401(k) or IRA? Or are you among those who are counting on Social Security for the majority of your retirement income?

And if you are retired, tell us how you put aside money during your working years. What sacrifices did you make so you could retire comfortably? Please share your experiences — positive and negative — with your fellow readers in the Money and Markets comment section.

Our Readers Respond

Regular columnist Mike Larson is out this week. He will be reviewing your comments upon his return and respond to as many as possible at that time.

Other Developments of the Day

Strange things continued to happen in regard to North Korea and the Internet. The country, which has been accused of the hacking of Sony Pictures, suffered a complete Internet outage for several hours before its links were restored Tuesday. U.S. officials said the U.S. wasn’t involved in whatever happened. Dyn, a U.S.-based company that monitors the Internet, said the reason for the outage wasn’t known — possibly a technical glitch or a hacking attack from some other source. Most observers speculate that the problems did, in fact, stem from technical matters. Few people in North Korea have access to the Internet and nearly all of the country’s web traffic must go through China’s infrastructure.

Some might say that strange things keep happening with the U.S. economy as well. The Commerce Department reported that gross domestic product grew at a 5 percent annual rate in the third quarter, the largest advance since 2003 and up from a previous estimate of 3.9 percent. Analysts had been expecting a figure closer to 4.3 percent growth. The unexpected jump followed a gain of 4.6 percent in the second quarter. The showing helped spur U.S. equities to strong early gains and sent the Dow over the 18,000 level.

Meanwhile, consumer spending also rose more than forecast in November, boosted by lower gasoline prices and indicating the most important element of the U.S. economy — the consumer — is gaining confidence.“Lower gasoline prices are providing a boost, and we haven’t even seen the full benefit yet. The job market has been a big positive,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, was quoted by Bloomberg as saying.

And as many people head into the holiday break, weather warnings are in effect and could disrupt travel plans of many Americans. The National Weather Service said that a “high-impact event” could cause major flight delays at New York airports on Christmas Eve, with heavy rain and wind gusts. Here’s the NWS summary: “A strong storm system will bring potential for severe weather, heavy rainfall and flooding, and heavy snow from the Gulf Coast to the Great Lakes through Wednesday. Severe storms are possible Tuesday across the Gulf Coast states with damaging winds as the primary threat; however, a tornado cannot be ruled out. Flash flooding is also possible across parts of the Southeast through Wednesday.”

If you’re planning to travel, the Money and Markets team hopes you have a safe and successful trip.

Remember, you can join your fellow readers by commenting on your thoughts about retirement preparation or on any other issue by clicking here.

Best wishes,

George Lambert

{72 comments }

DebbieTuesday, December 23, 2014 at 5:22 pm

My husband started a 401 K savings early, but with a low participation. He retired quite well with several hundred thousand in the account.
What most people overlook, is their spending. Our bills are always kept low, and all credit cards are paid off within a few months of the charges.
When I want to make a large purchase, such as a car, I save up for it so I can pay cash (which gives you lots of leverage in price reduction) or at least have a large down so you have very low payments.
Learn to be frugal now, and it will be much easier when you retire, plus you it will leave you more $$ to save now.

Jim SlagowskiTuesday, December 23, 2014 at 5:26 pm

Wow, I started late due to my military career. So, once I got a civilian job and started saving, I was already 45 and way behind in my savings for retirement. I had around $1000 in a IRA account at my credit union. My new job offered a 401K with a company match if you contributed at least 6%. So I started out at the 6% and increased it over time. I have now been working here 10 years and I have around $240K in my account while contributing at a 12% clip and that is with the crash in 2007-2008. I also contribute to an IRA (still at the credit union) and a Roth IRA every month. So it is possible to start late, I may not have a million but I have more than most and will continue for another couple of years.

KGTuesday, December 23, 2014 at 5:37 pm

What many Conservatives fail to understand is the necessity of Social Security Insurance. While it would be satisfactory to many so-called “Patriots” to see old people starving in the streets because they didn’t save enough money for retirement, most Americans do NOT want to see that. Even the “Gipper” admitted that Social Security has nothing to do with the deficit:

youtube*com/watch?v=ihUoRD4pYzI

IvanTuesday, December 23, 2014 at 5:48 pm

I put max amounts is iras , 401Ks, etc bought whole life ins(maybe the best of all the plans)
Somewhere between a half and a mill in different places. Still working full time at 66. Who was it that said “Don’t get old without no money honey”?

nTuesday, December 23, 2014 at 5:55 pm

We will have a substantial SS benefit when we both start taking it, but even if we got zero, we would be fine. Been socking away since day One into 401k’s and IRAs which with that miraculous power of compounding, has allowed us to save over a million plus send 3 kids to college with no loans! Our combined income has never been high. The secret is self control and loving saving as much or more than spending. We feel if we did it, almost any middle-class family can too.

joanTuesday, December 23, 2014 at 6:00 pm

It is not much of an incentive to save with the Federal Reserve’s ZIRP policy of the last 6 years. When people look at rates from zero to 2-3% on CD’s and high quality bonds, it does not grab their attention. This together with the stock market crises in recent history have made many people wary of stocks

I thot I had saved enough but the consequences of eroding capital in recent years due to ZIRP now leave me worried at age 83. Most of my income seems to go to taxes due to Mandatory Distributions from IRA, property taxes, various insurance payments and utility and Comcast bills.

I fear for the future of the babyboomers retirement

TIMTuesday, December 23, 2014 at 6:02 pm

SOMEHOW I HAVE MANAGED TO ACCUMULATE ABOUT 400K IN VARIOUS MUTUAL FUNDS AND INDIVIDUAL STOCKS, BUT AT ALMOST 67 YRS (IN 3 WEEKS) I STILL TREMBLE IN FEAR OF OUTGROWING IT ALL, EVEN WITH ABOUT 2,200 A MONTH IN SS AND VA DISABILITY PAYMENTS( AGENT ORANGE EXPOSURE IN VIETNAM).

Axel KornfuehrerTuesday, December 23, 2014 at 6:05 pm

While I did not start saving for retirement until age 40, I was fortunate to be able to put away 15% of my income regularly into a 401K. The one exception was during 4 years when, because of economic conditions, I was in and out of unemployment several times. Now in retirement, my wife and I are not rich, but we are comfortable. My advice — If you can afford it, put away the maximum 15% into your retirement savings plan.

Rob WTuesday, December 23, 2014 at 6:12 pm

Started investing 10% of income 1955. Had a lot of loses in market downturns since then. However, maintained that percentage until retired at 86. Guess my wife of 65 years and I’ll will have enough to live on if the government does not destroy economy ( country is bankrupt)

Mardy ShepherdTuesday, December 23, 2014 at 6:12 pm

Dear Money and Markets,
Thanks for this informative, yet sobering, article. My wife and I are retired. I am 61, she is 64. We have been married 36 years. We began our married life with about $ 5,000 between us, and a modest home. We agreed early on to two financial principles: 1.) we tithed, and 2.) we saved, and invested, every dime we could. We had some other principles as well. For instance, we NEVER looked at a home as an investment. When our acquaintances were sinking every dime, and taking unreasonable debt for houses, in the 70’s and 80’s, we lived modestly, and chunked significant portions of our pay into savings accounts, investments, and we ALWAYS fully funded our IRA’S. Our investments grew to just short of $ 2MM. by the time we were both retired. We set a portion of this up in a GMIB in 2008. Today, we have a $ 90K. per year income, guaranteed for life, which will never decrease. This does not include social security. So, my advice to the young…1.) do not be seduced by the world of materialism, 2.) sacrifice, save, and WISELY invest. Use an expert, if necessary. But, make certain it is someone you have thoroughly vetted and can trust! 3.) make modest debt work for YOU. Pay all credit cards off at the end of each month. 4.) be content to GET RICH SLOWLY. If you do these things, and If you are blessed to always have jobs, and good health, as we were, you will wake up one day down the road and realize that you are indeed financially rich. Also, I am aware every day that kids coming along now have a tougher road than we had. For one, many are saddled with student debt. My advice here is to seek the most inexpensive ways to service this debt. A GOOD counselor could be beneficial in this process. One other thing…make certain you always have good health insurance. Medical bills can wreck you financially. One other principle…if, and when, you say “I DO”, make Certain YOU MEAN IT! The other thing that has financially WRECKED some of the people I know is divorce. Divorce is a financial disaster! Thanks for allowing me to share these thoughts.

I am now 73 and retired. When I was younger, I didn’t put money away for retirement because, frankly, I didn’t have it. I bought an acre of land and had a house built on it for $24,000 in 1975. I qualified for a rural housing loan and paid no interest for years. I was working for nursing homes, which did not have 401ks and all that jazz.

When I thought about retirement at all, I could not see the sense in even trying to save enough to live on since inflation was always with us. What would seem like a magnificent amount of money in the 60’s would likely be a pittance in the early 2000s. I paid my house off in the 80’s. I added a few acres, my husband built a horse barn and we started a stable. We lived in Massachusetts and even though we had no mortgage, we knew we could not retire there because of the taxes.

We sold the property about 10 minutes before the housing bust, and bought a farm in West Virginia. The money from the sale bought a much larger piece of property because WV did not participate in the housing boom. The property is paid for, the property taxes are less than $100 a year, and heating costs are probably a third or less than they were in Massachusetts.

So what I am saying is that I looked at retirement from the other side and instead of asking “How can I save enough money to retire?”, I asked “How can I keep my expenses minimal so that I can live on Social Security?” I have no mortgage, very low taxes, raise my own beef and pork and vegetables. I drive a 2010 Prius and will probably keep it for another 8 to 10 years. I have a couple of small annuities and Social Security for income. I always have plenty of money left over at the end of the month.

DougTuesday, December 23, 2014 at 6:39 pm

At the end of the day unless you have a generous pension it is more the luck of the draw than good planning if you can retire with some comfort. Surviving a 401 K is just that.

Mike PTuesday, December 23, 2014 at 6:43 pm

I retired earlier this year just before reaching 58 years of age. I always lived below my means. Although I was a maniacal saver, I never invested my money wisely. I managed to accumulate 1.5M through very high risk investments in individual stocks, primarily biotech. Now in retirement, I’ve become far more conservative, but a risk assessment of my portfolio would still rate me a hyper-aggressive investor. In order to retire early (age 58) I believe an individual that has no pension needs at least 2M to be entirely secure. A 2M portfolio could easily withstand a 60 percent decline and still be able to meet daily living expenses. My goal it to continue to grow my portfolio from 1.5M to 1.8M within five years, while funding my living expenses from bond coupons and a private mortgage note. At that point, I plan to have cashed out of individual stocks and increase the allocation to my income replacement fund (FIXRX) from 500K to 1.3M. I will draw SS at 66 1/3, receiving 30K annually in 2014 dollars. Hopefully I’ll be in a better financial position when I turn 62 or 63, but I will need to continue my lucky streak to get there. Should the economy turn down, I’ll retrench and protect what I’ve got.

My advice to others is to save and live BELOW your means. Most people would be advised to invest in broad market index funds and grow wealth slowly, providing you started early enough. I could have done just as well taking this route, perhaps better. But future returns are unlikely to come close to matching what we’ve witnessed since 2009, so you need a very long runway.

Gary DennisTuesday, December 23, 2014 at 7:26 pm

Everyone has their life path – their story, and not all are fortunate – as some have stated herein, to have abundance of money at retirement – even though they carefully managed their money throughout their working career. Divorce and child support, along with the loss of a home – investments – loss of a successful business and investment in business due to divorce – and ongoing – seemingly never-ending serious health issues and medications can keep one continually broke and in debt in order to survive – even with a good steady income. Even remarriage – for other than monetary reasons – can continue to be a financially draining experience. Then comes the currently overwhelming costs to pay for burial expenses for you and your wife. Then the downturn of 2007-08, and many lost much of their retirement savings. There is serious concern that another downturn – loss – or confiscation of retirement savings by the government, could again occur – possibly much sooner than we might expect. (RE: “Pension plans to be looted nationwide as Congress okays institutional theft of funds” Washington Post and naturalnews.com – 12/12/14). .
I believe – given the financial condition of our country,, and the many projections of possible loss in the near future – we need to prepare to possibly live on what we may hopefully continue to get from social security.
With our many expenses / losses over the years – as stated herein – we have organized – cut back – got out of debt, and are now quite able to live simply on our social security – medicare and supplemental health insurance – and sometimes a small extension of credit. I believe instead of fearing that we might not have enough for our retirement years – to live the lifestyle that we desire and hope for, we may need to consider the question – “How would we survive financially if all or most of our monetary/financial resources were gone – almost overnight – except social security, medicare and possibly our home.” Many experts suggest this may happen, given the poor financial condition of our country.
Just some reflections and thoughts from a 78 year old – and a 73 year old long ailing wife – another perspective. Best wishes to all.

HowardTuesday, December 23, 2014 at 7:54 pm

It is lovely to hear from the real America occasionally. All sides of Washington have managed to accumulate $17 Trillion in debt for our kids to pay off. Makes you wonder if they even know we are here?

william ahrensTuesday, December 23, 2014 at 7:57 pm

The resources made available to those of us who are average people, particularly those who are in the so called “middle class” are daunting. Interest rates are insulting which leaves speculative venues, many of which are questionable. The stock market helps if you know what you’re doing, absent that needed as a skilled portfolio manager who has your best interests at heart. In short there have been few resources available to aid the retirement of those of us who rank in the 65-72 range unless those with a vested interest have invested wisely in real-estate or some wise esoteric resource not available to those of us who are not that connected with the political process or the nuances of the extremely complex tax code, which is designed to tap the ignorant in favor of the privileged.

RickTuesday, December 23, 2014 at 8:06 pm

Wow. I married my wife 28.5 years ago she had $59k in her 401k. I’m a tight wad.
We live in a 860 sq ft home. Paid off years ago. We both drive newer car and truck.
I drive a 1998 Chevy work truck. She drives a 2000 Ford. Car. We talked a lot about saving before we were married. I’m bought directly from the companies. There stocks were cheap when I only had to pay $250 the first time. Believe me or not I’m 56 today been retired since OCT 1996. My wife love’s her job and plans on retiring in 4 years. Our net worth. I am ashamed to omit it. I tell young to buy stock’s. They look at me and think I’m a failure. Because I dress like I’m poor.
I remember meeting sam Walton. Driving and old white ford truck and dressed in bibs.

DrewTuesday, December 23, 2014 at 8:42 pm

Our Experiences: My wife and I saved money starting when we got married. Much was in mutual funds and stocks that we selected with care and just left alone for years and years. We bought belongings on sale, ate and entertained at home, vacationed economically, tried to make money jumping in and out of stocks and lost money but learned a lot. Cut back so that daughter would have a good start with a mom at home for a bit more than a decade. Invested a modest amount in a UGMA account for our child which paid fully for the first two years of college when the time came. Started a part-time retail business and lost money but learned a lot. Started a service business and made some money and learned a lot about real estate from a client. Never got vested in a pension plan, so started investing in residential rental real estate. Polished lovely old homes that had been treated badly and filled them with very well screened delightful tenants willing to pay a bit extra. Cash flow and tax benefits started providing generous disposable income that was saved. Contracted for paid property management and now enjoying income from social security, IRA’s, and cash flow from properties and the mortgages taken back when some were sold. Plan to sell the remainder in the next couple of years. Have very sufficient income to support gifting to children and relatives, travel, and getting involved in lots of things that interest us. Looking back, I think the secrets were that we always lived on less than our income, always saved something, regardless, and took some bold steps that educated and benefitted us.

RUSS SMITHTuesday, December 23, 2014 at 9:39 pm

Hi!, Patrons Of Money & Markets Et. Al.:
Retirement should be outlawed. When people retire they take money out of the float of all the retirement funds and spend it. Instead they should work until they’re at least 100 at Wall Mart as a greeter etc. That way they shouldn’t have much time for loitering in their old age. That’s what’s wrong with America people are unwilling to work until they die. With the US birth rate down significantly over the past 6 – 7 years working all your life should be mandatory not elective. Our bodies were made for working not lying around. There would be far less incidents of automobile accidents, if people were kept off the road working and the lazy among us would in this way find mentors to encourage them to emulate working as well. If you don’t like to work try living in Russia, China or Japan for example where their populations are getting older. The bible says work or don’t eat!! My deceased friend use to say that, unless we work and contribute something to society, we are merely here to use up someone else’s air. How old is Dr. Weiss and he’s still working isn’t he folks? He’s a solid example about which this article has been written!! Remember the old song: GET A JOB? Working all day and half the night will help anyone get a much better, restful night’s sleep. Try it and you’ll like it!!

HowardWednesday, December 24, 2014 at 2:50 pm

Hi Russ

Even Scrooge learnt to lighten up at Christmas

DaleTuesday, December 23, 2014 at 10:06 pm

I saved it only to loose it. I started saving for retirement when the company, for which I was one of the managers, adopted a 401k plan. I saved the requirement for matching company funds, which amounted to 5% of my income. Things were great until late 2008. My sales, and income went down in 2009 along with the stock market. Then, after 28 years as manager, I lost my job due to poor numbers. I spent the next two years underemployed. I had to withdraw funds from my 401k, which had lost considerable value, to pay off the second mortgage. The extra taxes killed us. Now, my 401k is a roll over IRA and it looks pathetic.
I’m not lucky in the markets. I’ve tried various investments and recos put out by the Weiss Group, but I either pick the ones that lose or the timing is wrong. Twice, the government stepped in and blew my strategy. I jumped on gold when Larry pulled the trigger, only to watch the bears take it further down the hill. I can’t afford the special services, the cost eats up my investment money.
Lately, I’ve been self employed, and struggling, with 1 employee for a year and the various taxes (and accounting fees) are killing me. There are more licenses, fees, taxes, and penalties than I could have imagined. The liberal news media can say what they want about the economy, but until this country eases up on small businesses there will be no fast recovery. Even if there even is one, the average family no longer has any loose money or disposable income, and the stock market is unpredictable and fragile. So, instead of saving, we’re spending our retirement to exist, now.

EricWednesday, December 24, 2014 at 10:05 am

I completely understand your plight. I was also in a very good career 20 years ago and then the first 9-11 hit. The company I worked for was hit hard and went into bankruptcy, removing nearly 60% of its workforce and I was part of that massive cut. I was unemployed for nearly a year before I managed to get a job earning just over $10 an hour and happy to finally get a job. But it was a far cry from the $45 hourly I had been getting and I went through personal bankruptcy, losing real estate, 401K and automobile.. Finally, I’m on my path to try to rebuild before my retirement age. Sometimes life hits hard and we just need to pick up and keep trying. It beats the alternative of living on the streets and my Mom is still counting on me. I refuse to let her down.

jerryTuesday, December 23, 2014 at 11:28 pm

I worked 80-100 hours per week while my wife stayed home for 30 years. I set aside retirement money, invested in property, operated my own business(s) for 27 years and was looking forward to retirement at age 62.(I was 58).
My wife attended a seminar for women only)average attendance one Saturday every month titled ‘How to divorce your husband and take all his assets’ and 3 years later filed had me served with divorce papers and a restraining order when I came home from work one day when I was 58. Needless to say, she took everything. 1/2 a million dollars, bankrupted my businesses, took our Kids college savings accts and the Grandkids savings accounts. I had invested $150,000 in a business for her 3 years earlier and she got all the assets from that. My attorney cost me $22,000 for which I got lots of nothing except direction on how to comply with laws and court orders.
I ended up with $65,000 in debt and my life destroyed.
My point is save some if you can, invest in homes, etc. If its borderline, spend it and create some memories….anything can happen to your savings….medical problems(all policies have a limit),divorce by a greedy, narcissistic partner, accidents, etc. So spend it and hope for the best.

Carol AdamsWednesday, December 24, 2014 at 12:11 am

Want a secure retirement:
The secret to savings is start young. Thus, if you start your small children on a path to saving, they will continue for the rest of their lives. If they earn 25 cents, add a nickel
to their piggy banks, explain it is interest, like you get from your bank. Take them inside
a bank with you at least twice a year. Never to withdraw money…just put in savings. Let them count the money in their piggy banks frequently. Watching it grow is planting a seed. When they get a real job, they need to save 20%, over and above their Roth 401K plan. Teach them to search out high paying accounts in solid institutions. As they age, teach them about credit, never spend more than you can “pay in full” when the bill comes at the end of the month. It’s better to pay cash for a car, than paying finance charges.
Gives you a great deal of leverage when purchasing. Barring accidents or freaks of nature
hold your cars for 10 years, during that time save for the next new car. When they have saved enough to invest…it’s time for Money and Markets. You will never have to worry about them having money to retire, or a cushion for hard times.

This has been a practice in my family for 3 generations. My son retired at 47 and started
a second career 2 years later. He had a generous monthly retirement from his employer, he just wanted to contribute his knowledge.

Alfred L Moniot MDWednesday, December 24, 2014 at 7:34 am

I saved every tax advantaged dime and lots more beginning with annual P&PS contributions of $30,000; maxed out IRAs; took advantage of all 401k matches, etc.
I retired 31 Aug 2003 at age 58.75 after having paid Max SS portion of FICA for 35 + years, and took Max SS retirement benefits (reduced for age) TAX FREE at 62.
That allowed me to essentially avoid w/d s from my substantial IRAs. However, beginning in 2015, I have to begin taking RMDs (MRDs). Looks like nearly an additional US$81,000. in 2015 which I don’t want nor need, and I’ll have to begin paying income tax on my SS benefits as well,
My only car will be 14 years old in June, so I’ll replace that.
Have been very fortunate buying and selling my several homes over 4 decades – paid cash for the last two including this 6500 sg ft place which I bought new in Aug 2005. I do have a housekeeper and gardener (a married couple) – had them for almost 9 years now.
I live and travel like royalty (unlike Barry ‘tho, I do pay my expenses out of pocket with “earned” after tax USDs; Pesos, and Euro).
retired expatriate (11.5 years in Conde Nast’s 2013 “World’s Best City”)

georgeWednesday, December 24, 2014 at 9:10 am

Misinformation and procrastination are the problem here. Unfortunately most Americans are unaware of the retirement requirements or it doesn’t interest them today!. These statistics have existed over the years, and with as many articles as I have read about it, doesn’t seem to alarm anyone. It’s the same thing that allows us NOT to think about our 18 trillion dollar US national debt which WILL eventually affect our retirement. Reality will come when it’s to late to respond.

I think it’s important to educate ourselves about the surrounding financial world and not be lead to financial destruction blindly following so called ‘EXPERTS”. Beware when the deceptive My IRA offered by our leaders gets offered. It’s a wolf in sheep’s clothing.

LindaWednesday, December 24, 2014 at 9:43 am

so true

LindaWednesday, December 24, 2014 at 9:42 am

Married 46 years. 6 children who have all graduated from college. Highest income made in one year–83,000. Went broke in our 30s in farming. Husband started teaching–not much money but mandatory retirement contributions. I was basically a stay at home mom most of my life although I did have a small business for 15 years. While raising my children, I learned how to be frugal. It was a good exercise. Became debt free in 2006, all children had graduated from college and we went to a foreign country to live for 5 years teaching ESL. Invested money from the sale of our house in an REIT. Researched the cost of living in cities and states. Moved to a solvent state in the great SW. Taxes are not expensive. Income from pension and SS and part time job for my husband is over 5000/month. Paid cash for used car and pickup. Had to borrow 50,000 because we lacked that much cash in the purchase price of our house in the mountains in 2012. Determined a budget. Now owe less than 15,000 on house. Will be debt free October,2015. Don’t use credit cards. Don’t eat out much. Enjoy our neighbors. Walk in God’s beautiful nature. Have the privilege of tithing and giving. Save regularly.
You know, there just isn’t much that I need. I cleaned out the house of my 94 year old mother and realized we spend our lives to buy “stuff” that no one wants and the “stuff” clutters our homes. My husband says we can’t put anything in the attic. If I think I want to put something in the attic, I just go ahead and throw the item away. It will save the time doing it later.
All my children have money invested for retirement. The youngest who is 34 has over 80,000 invested. We never said save but they just figured it out. Oldest child is 43 and most of them about have their houses paid off. Our family culture is to give, save and invest.
God is good.

DanSaturday, December 27, 2014 at 3:54 pm

Thank you for your story. It sounds like ours in that my wife was a stay at home mother and we barely made enough to live on for our first 25 years of marriage. We tithed faithfully and God multiplied our money in so many ways. We were frugal and made the most of what we had and in the past 15 years put money away for retirement. Our four kids graduated from college with no debt and are all doing well spiritually and financially. We have been able to prepare for retirement through wise investment and through owning two duplexes that are now paid off. We have no debt as of this past year and will retire in one more year with assets that should provide our needs through retirement. We never borrowed any money except for our home and were careful with our spending.

EricWednesday, December 24, 2014 at 9:51 am

I’m contributing to my 401K at work. Not as much as I’d like because I’m also caring for my mom in her retirement years and she didn’t have the opportunity to contribute to a work related 401k and she decided to make payments into her farm instead, as her ‘retirement’. Now I’m making the farm payments and the insurance and taxes as well as paying for my own home, insurance and taxes. And trying to save for my personal retirement. The “good news” is that the men in my family history don’t live much past my current age … so the money I’m saving now just might be going to my mom for her remaining years or possibly my kids if I outlive her. If I do manage to live to retirement at about age 65 or so, then I should have a reasonable $1700 monthly pension from work plus whatever Social Security is available at the time (currently projected to be over $2400 monthly – but who really knows what will happen in the next 10 years) PLUS the money I am saving in my 401K, which should be well over $250k by then, assuming I’m able to continue to contribute my maximum annually and at least some of my ‘catch up’. All in all, I should be OK and still be able to help my kids and grandkids in my retirement years.

randolph smithWednesday, December 24, 2014 at 10:29 am

In our case the secret of saving enough for retirement was to learn to be content living below your means (income) so there is overage to save and invest. We have a mentally handicapped daughter who will need care when we are not able. This is an incentive to live a future oriented life. Well OK, drive that auto for 15 years, live in the same house for 38 years, survive three job losses (shut down 3 plants). Don’t worry about keeping up with the Jones’s. Invest early as possible…the quality 100 shares invested 30 years ago now return 42% per year on the original investment.

RobertWednesday, December 24, 2014 at 1:49 pm

I have been retired since 3/1/2001. I lost 40% of my 401k in the 99 – 20000 stock market correction. I had $169,??? in my 401k (when I retired). I then built it back up to $319,??? by the 2008 Correction (without any contributions – just buying and selling – I also rolled it over to an IRA so that I could buy stocks rather than mutual funds after I retired). I lost money in the 2008 correction and then lost $200,??? when GM went bankrupt (I retired from GM and never believed that they would go bankrupt – had all of my eggs in that basket). Now I am trying to rebuild (but this time I am following Larry Edelson – hopefully I will survive). It is not how much you have when you retire – it is how much you can keep after you retire – everyone wants what you have).
I also believe that if there had not been restrictions on my 401k that only allowed me to buy and hold mutual funds for 30 days at a time I would have had more in my 401k (I would have lost more – but at least I would have had a better shot at making more).

HowardWednesday, December 24, 2014 at 3:15 pm

Hi George

Cruising, boozing and snoozing is how one of my friends put it

BillWednesday, December 24, 2014 at 9:19 pm

I am a DON government worker with 31 years of active service. I worked for Siemens for 11 years prior, and 4 years I the active Navy military prior to that. I will be 61 years old this coming year. I have a very small Siemens Annuity that can pay my electric bill when I retire. I have the FERS Annuity which uses the same formula as the Seimens plan, but with a much larger 3 year average since I am still working and will have a little over 36 years when I retire. I also presently contribute to the TSP, which is the government version is a 401K Retirement Savings plan. I have been saving about 25% of my pay for the last 20 years, and not quite that much on the 11 years prior. When I first started working for the government, I could only afford to put 1% away and the government matched it. When I received raises, I increased my TSP by the same % every year until I matched the maximum allowable. When I worked overtime mainly when overseas at shipyards, I saved half my overtime as well. When, the crash in 1998 and 2008 occurred, I hung in there for the long haul, another words, I did not panic because the market goes up and down. When the market crashed, I purchased more stock and when it rose above the G Fund, I put my money 100 % in the G Fund, not the brightest move, but not the dumbest either. Lastly, I have been paying into social security since1970, and have earned very close to being inline for a maximum contribution. We sacrificed a lot by saving for our retirement, but the kids all had a place to live, well fed, and clothed, and two received scholarships and out on their own. We helped, but the money we gave them for college support was a loan, and basically to teach them responsibility and hard work as their parents and grandparents did the same. Both, the wife and I have cars to go to work that are 13 years old. My wife did not work until the kids were all out of high school, which was our plan, so their would always be supervision as well as taking care of the family. In the summer, we keep the thermostat at 75, and in the winter at 62. When, things break, I am a handyman for most repairs and replacements. We buy when things are on sale and always bicker for a better price than advertised. We set a budget and stick to it. Our only long term debt is our Mortgage of about $ 500 a month. We have one charge card that we use to pay all our bills completely off every month. When the government shut down and we did not get paid, we reduced our savings, and tightened up even more. I am not bragging, I am trying to make a point. The point is God helps those that help themselves. I came from a family of 10 and was the oldest. I started earning money from hard work at the age of 11 so the family could eat and be clothed etc, ever little bit helps from each family member. 4 of 6 boys joined the Navy and Air Force on their 18th birthday. The GI bill helped me through technical school and college. My wife’s pay helped put me through engineering at the local University. I changed jobs to work for the Navy and they contributed to my Masters in Electrical Engineering and Engineering Management that was all from nights and weekend courses for 10 years. We also put off having kids for 6 years until we could afford them. Family believes it was because I was to burned out from all the work, I can assure you that was not true, but I am definitely burned out today. I hope this helps someone else, especially, the younger folks. Once you are forced to retire, it is way too late to worry how you will pay the bills. I care, but not that much.

WilliamWednesday, December 24, 2014 at 9:57 pm

Well, its certainly true that wages have not kept up with CPI no matter how small it is. The main concern for everyone on or close to retirement is ‘big’ inflation – say anything over 4% for any length of time comming after the economy ‘resets’. Regarding 401Ks, I wonder if extra Social Security payments might be a better way to go.

JeffThursday, December 25, 2014 at 11:17 pm

I never thought of long term retirement savings as a sacrifice. My view was that the sacrifice to have other things is winding up broke at 65. I’ve only had 17 years to save money in a 401K, but at the age of 57, I have nearly 1 million dollars in my account. Compound interest, a pre-tax advantage, yhe employer match and reinvested dividends… the power of it is incredible.

BubbaFriday, December 26, 2014 at 1:03 pm

I appreciate the candor and common sense every day American people can contribute to the subject of planning for the inevitable day we all get old an must rely on retirement savings. I agree its a lot easier to obtain financial security if one shuns the desire to always appear that you have more than the next guy. There are plenty of millionaires out there that you would never suspect if simply looking at outward appearances. These days
more and more of retirement planning is falling on our own personal financial management abilities.
I have always adhered to having a diverse financial asset base. Investment real estate has worked the best for me due primarily to strategic leverage using a reasonable amount of borrowed funds, tax advantages and steady cash flow generated from tenants. Equity investing is good too but have found that using an index fund, solid fund manager or buying solid dividend paying blue chip companies when prices are depressed is much more successful than trying to beat the market on your own. Always take advantage of matching funds in your 401K. Marry for life if at all possible. Be a solid reliable family member and you just might get a little inheritance from that distant Aunt or Uncle that you weren’t expecting. That’s my 2 cents worth!

Rudolph C SandovalFriday, December 26, 2014 at 10:37 pm

I started to save for retirment at age 42. I started first with $50/month for a year which grew to as much as the maximum at age 60. I continued contibuting to my 403B until I retird age age 66 in 2009. Between my state pension and my contributions, I have a gross income of six figures per year. In the bible it is written that those who have and use it Weissly (pun intended ) I (God) will reward you with more. We am also generous to our Church. My philosophy is God, health, family, work and hobby in that order. By the way, we have five chldren; my wife was basically a stay at home mom and all our children have at least a B.A. degree and I averaged earning only $50,000/ per year.

StuartSaturday, December 27, 2014 at 12:07 pm

I saw something about needing $250000 to retire on. That sounds awfully low. Even with social security of $15000-20000 per year (if it exists) , one can expect to live 20 years past 65. Social security might be $30000-40000 for 2 who had earnings. Your medical alone will probably be $1300/yr for medicare B, $3000 per year for a supplemental plan and $500-1000 per year for the drug plan. Plus you will have co pays. Would $10000-15000/yr for two for medical seem reasonable? I think the barest minimum in a retirement plan is $500000 with a million being more reasonable. Of course, if you have a defined payment plan (annuity) then my numbers are wrong.

FredTuesday, December 30, 2014 at 8:36 pm

Agreed. 250000 might give you 1500-2000 a month annuity with a good company, depending on your age and several other factors. Add in SS and that will be a minimal retirement.

Richard PalmerSaturday, December 27, 2014 at 3:55 pm

I have consistently contributed to my 401K , even beyond employer matching, since 1987. We escaped one big bubble but lost nearly a decade of savings in another. We have tried 4 different money managers to help us manage our savings. They have all lost money. We presently have our 401k under management by Vanguard and that seems to be going better. For us, it seems like the whole 401k system is more of a wealth transfer scheme from the middle class to the bankers. So we “harvest” our 401k when it reaches about $20k and put it in a special life insurance policy. The policy is growing cash value tax free at 4% and now exceeds premiums paid significantly, plus substantial increases in death benefit each year. We have really been burned by the stock market and 401k.

EileenSaturday, January 3, 2015 at 2:44 pm

What life insurance company is this? I’ve never heard this particular scheme before, but it sounds relatively risk free and interesting. I’m very impressed by most of the comments I’ve read here, and forwarded the article and comments to my 24 year old for him to glean the wisdom presented. My husband and I were lucky to inherit some money. We’re conservative and savers, so although we lost $$ about 3 times in various busts, we’re still pretty good. About $500k in cash and equivalents. Our primary home is paid for, our cabin is paid for, and the equity line we used to buy the home we’re in for cash will be paid for when we sell that residence. Wouldn’t have done it that way, but circumstances made it the best thing to do at the time. We’re renting it for more than our costs, so it isn’t hurting us. My husband worked until he was 78. We’re 17 years apart, so I retired at 62. Although I think we’re reasonably well fixed, I absolutely worry about government confiscation of retirement accounts, inflation, etc. But you do what you can to prepare, and hope for the best!

EveleneMonday, December 29, 2014 at 11:18 am

My husband & I both grew up poor. We knew how to pinch pennies and we did all the time the children were growing up. We have always been very conservative people.We both worked (after the children were in school) and my husband saved money every week. Put it in the bank. First he saved his bonus’s at work. Never spent one penny of his bonus money. He bought U.S. Savings Bonds with them. We both worked at the same company & except for a small retirement plan we knew there would not ever be money paid out to us at retirement, Then the company went out of business, We took out our small retirement & invested it.)Then, as we became more prosperious he began in invest in CD’s & Money Markets. Then he tried the stock market. Had a financial advisor. (We made out the best in the 1970’s when Jimmy Carter was President and we were getting 18% on some of our CD’s) Made money & lost money in the stock market in 1987. Stayed out for 10 years. Then we both got back in again. Made some money & lost a lot in 2008. But we had enough other money in CD’s,.etc that it did not hurt us.Stayed out of the stock market. This year I invested again at my bank in a CD paying 2 1/4 % for 5 yrs.. Best interest we’ve had in a few years.We are not high-livers but we have enjoyed ourselves visiing relatives and friends. Husband is a bugger on savings. We are fine financially.Never made more than $62,000 a year. Did not buy any new cars for 17 years. Now we’ve had 10 since 1981.My car now is 12 1/2 yrs. old. The most we ever spent on a car was $23,000, a Subaru which I still drive. He drives a 1996 Ford truck & is 90 yrs.old. Retired from part-time job 4 yrs. ago and I worked part-time until I was 75. Didn’t need to, just wanted to. We have enough money to help out our grown children when needed.

deborah higginsTuesday, December 30, 2014 at 10:21 am

This is the way to go!

H. Craig BradleyTuesday, December 30, 2014 at 8:35 am

MORE GOVERNMENT INVOLVEMENT COMING IN RETIREMENT

The stated lack of adequate saving for retirement by 120 million Americans is much too big an issue for politicians to ignore much longer. As funding stress develops in the Federal government and especially with regard to shortfalls in established Federal entitlement programs, such as Social Security and Medicare, further changes will be required. It won’t happen until both conditions are ripe for it and we have the necessary political leadership. The current crew certainly does not seem up to it.

Costs in Medicare alone will balloon in future years as more and more baby boomers become Medicare eligible in the next 10 years. There is no way to avoid a greater funding crisis in govt. Higher interest rates will start the process of rotating financial and market crisis. These in turn will create political crisis and social chaos in the transition.

Soon, the Federal Government will have to institute some kind of national mandatory savings plan for all employees without a pension or employer sponsored individual retirement account. We already have too many individuals who can not save, only work part-time, or don’t work at all ( SSDI, Food Stamps, etc.).

Australia has had a plan for some time called “Superannuation” or “Super” for short. It mandates ALL Australian employers withdrawal 7% of each employee’s wages from each paycheck and deposit it in a fund or funds selected by employees. Employer’s must pay a share of the investment, as well. Funds can not be withdrawn or touched until one reaches the minimum age for retirement ( 65 years of age ).

Calif. Gov. Jerry Brown already signed a bill in Calif. addressing this retirement savings issue by requiring employers to establish and contribute to employee retirement accounts at some future deadline. The rules and such were initially established ( vaguely). Its only a precursor to what the Federal government will eventually be forced to do.

I find it particularly interesting that neither political party seems to be currently talking about the matter. In fact, they both avoid mention of it. It probably will not be a campaign issue or even a debate topic in 2016. It must not be important to them but I am sure it will eventually become a high priority in not too many more years. In the meantime, our representatives continue to “kick the can down the road” some more for maximum yardage as long as they can.

BOTATuesday, December 30, 2014 at 9:43 am

Simply ridiculous – the Govt needs to back off and people need to be accountable. Give me the money the govt has stolen ‘on my behalf’ from myself and my employers. I would’ve done 4x better with it by sticking it in brainless CD’s.

Brown is a commie imbecile in a fiscally bankrupt state.

deborah higginsTuesday, December 30, 2014 at 10:20 am

The more the government gets involved, the more people lose. Look at social security. If they had invested it for me like they said they would, and not “stolen” it, I’d be rich now.

Bob FTuesday, December 30, 2014 at 8:47 am

I’m a college graduate so my results are different than someone flipping burgers.

I saved 10% using an IRA from age 23 to age 42 then saved 15% (later 25%) using a SEP-IRA from age 43 to age 66. The best approach is to save first and structure your life around what is left.

There are two types of people, those who save and those who won’t save. In an average family of 4 kids, there are typically 2 savers and 2 spenders. It’s a personality type. One of my retirement concerns is spenders who believe my savings should be confiscated because I haven’t spent my money like they believe I should have.

Southern Europe has more spenders than savers, Northern Europe has more savers than spenders. That is probably due to climatic conditions: If a German/Swede/Norwegian didn’t save, his family starved unlike the Greeks/Italians/Spanish. The Euro problem all boils down to Germans saying the Greeks should reduce their debt while the Greeks say the Germans should let Greeks help spend the Germans’ savings.

AllenTuesday, December 30, 2014 at 9:04 am

Many people who are not saving are depending on the government to take it from those who do save and give it to them. I’ve heard them say it in so many words.

Though I always knew I needed to I didn’t really have the steady discipline until our company implemented the 401-K plan in 1984. They had a “retirement” plan that had the reputation of paying next to nothing. I was amazed at their 401-K offering. It was an unbelievably good deal especially with the matching. I highly recommended it to all those in the plant that I managed. I began studying the options of where to invest and tracked it each week. I actually wrote an unofficial company newsletter that tracked the investment options, interest rates, gold, and silver.

When I received a bonus and wanted to invest it a friend recommended a broker who told me to invest in 20th Century funds and to come back and see him when I had “some money”. (-:

Spreadsheets were a fantastic invention that not only allowed me to easier track investments, but model “what if’s” as well. I continue to use them today.

I’ve always been interested in investing and had $2,000 primarily in IBM stock when I married in 1970. I don’t know why it interested me then and still does today.

One short story. When talking to our sales manager one day about 20 years ago learned she had no savings. I encouraged her to save. She made very good money and bought toys. She was single. She said that when she became retirement age she would find her a “sugar daddy”. I told her they were looking for 20 year olds. She continued to buy toys. She continues to work today and now hopes to die on the job as she has no savings.

Preparing for the future seems to be in ones biological makeup. You are either built to enjoy seeing money grow, or you prefer piling up toys (cars, boats, big TVs, horses, etc.). Those who buy toys don’t mind living off others.

BarbaraNJTuesday, December 30, 2014 at 9:12 am

I have been retired since 2004. I had a good pension plan with employer. Self-managed as only 4 employees in it. It was victim of a Ponzi scheme in 1997. Feds recovered a good deal of the money. Then we went to a SEP. When I retired I moved my money to an IRA and now have annuity income (graded method for inflation) from TIAA-CREF as well as pretty high SS payments. Because there were some losses from the Ponzi, I bought two two-family rental properties– more comfortable with that than stocks– still have them. They are in Jersey City NJ– a good area. Manage them myself. Have had only one problem tenant. Good income and properties have appreciated a lot. Also an art collector– not rolling in dough– just made good picks– and donate art to museums for tax deductions to cover the untaxed income. Also have a part-time job in retirement that pays well.

I am writing this to show there are many ways to get to a good retirement income. I read Money and Markets for economic info, rather than stock info.

I would like Money and Markets to write more about real estate investing.

ianTuesday, December 30, 2014 at 9:15 am

I must admit there is good point to the US system.Here in the UK,the question is why should I save and why should I WORK.the state will look after us.Lets say you fore close on your house,great,Then the state jumps in, gives you a council house(a state house depending on the size of your family,Free!) gives you state benefits(cash)and live like this for years,but lets say,you have some money and the same happens,you will spend it till its gone.So why save.We all love social security,dont we

deborah higginsTuesday, December 30, 2014 at 10:15 am

I wouldn’t rely on any government. Laws change. Governments go broke.

DaveTuesday, December 30, 2014 at 9:21 am

My wife and I are both college grads; she’s a retired CPA and I’m a geophysicist working in oil and gas exploration. O & G is highly cyclical and I’ve had to change jobs, move many times, and have been laid-off. Our plan from the outset (25+/- year-olds back then) was to live way beneath our means; skip boats, oversize flashy houses, basically no flash. We’ve been fortunate enough to be able to max-out 401ks and save on an after-tax basis. I think that, in retrospect, I’ve over-weighted in resources, but my account advisers at a large trading house were not too alarmed, since I could always explain why we held a given position. In general though, components that would meet Dr. Weiss’ qualifications did well, and we stayed out of the tech bubble. The commodity super cycle is ending according to some gurus, so it is time to abandon some older paradigms (admit that I was wrong and toast those losing positions)! We look forward to retiring in the future, but I always have a bleary eye pointed cast on our government: We saved, invested, got to 7 figures in savings and don’t want to lose it to inflation, currency debasement, or out-and-out theft/ nationalization. My advice, although no one asked, is very basic; save early, spend less, invest wisely in financial assets, education, tools, and some real stuff, including land.

Thomas SchechterTuesday, December 30, 2014 at 9:37 am

I recently retired(November 1). Prior to retirement, my house and car were complete ly paid off, and I only have bills (insurancem,taxes, utilities, cable, cell phone ) to pay. I worked for the governemtn, and have a defined benefit pension and Social Security. I put away money in the 457b, 401 k, and when it became available, Roth 401k. ,I have $225000 in savings, as well as a $10,3000 annuity, entirely funded by the government. I son’t intend to touch my savings until required by law, unless there is an unexpected emergency. I am even able to save a samll amount monthly ion my savings account. .

Virg EgliTuesday, December 30, 2014 at 9:38 am

There are only 3 ways to make money. Work, have people working for you, and have money working for you. I purchased my first rental property in 1965 and am 85 years old and still have 2 apartment buildings that are now managed by a company. If my units are fully occupied, I have 14 people working for me every day. I also always invested the maximum in a 401k and have a fair amount invested in stocks which I still manage myself.
0NE MUST PLAN YOUR WORK AND WORK YOUR PLAN. H0PE THESE IDEAS WILL HELP SOMEONE.!!!!!!!!!!!!!!!!!

deborah higginsTuesday, December 30, 2014 at 10:10 am

How did I save for retirement? I looked forward to what my expenses would be and lowered them considerably. For example, I downsized to a home not needed for the kids who left the nest; worked at paying off my less costly home, then made it energy efficient ultimately adding solar so my electric bill came down to less than $20 per month, planted fruit trees to provide food for years to come, and learned to grow my own vegetables for better health reducing medical costs in the years ahead, then added a well to water the fruit trees and vegetables, reducing water bills. / Increasing income AND/OR decreasing expenses helps anyone trying to make ends meet, and this is also true in planning for retirement. My monthly housing is “pre-paid” by paying off my house now; my electric bills for the next 30 years can be considered “pre-paid” having paid $30K or so for solar power; my water for the garden, trees, and yard is “pre-paid” having paid $5K for a well and irrigation now, and these steps have reduced some of the expenses nearly everyone can expect to incur in retirement: housing, power, water, food, and medical. Since solar, well, and gardens are part of my exempt Florida homestead, they are also part of my “asset protection plan”. Paying off debt usually comes before saving up for retirement, but I’ve taken that a step further to pay off future expenses now. I’m hoping I will be glad I did. I also have money in an IRA, but leery of future law changes regarding it and potential stock and other losses.

WARREN BeelerTuesday, December 30, 2014 at 10:42 am

I was in the hospital for six day and am behind with all my investment decisions.
I am Pleased with Dr. Weiss’s Ultimate Portfolio.
Additionally I have a lifetime membership to all of Zacks .com portfolios of a bout 20 with daiiy updates on 14 portfolios with several updates during market hours. Using Zacks + two others I had a 42% return in 2013.
I am not interested in adding any more unless they are dirt cheap with the possibilities of s few excellent returns.
Best Regards

Warren Beeler

paulTuesday, December 30, 2014 at 11:00 am

In 1959 when gold was $35 an ounce I started a program to put away one ounce of gold I could sell every month for the rest of my life when I retired . I haven’t needed it yet but I have enough to last me twice my life expectancy and then some . How is that for starters ?

BillTuesday, December 30, 2014 at 11:18 am

My wife and I started saving intensely about 15 years ago. We drive beaters and live in a modest house. But the effects of maxed-out contributions to our 401(k) and TSP over that period have been remarkable. We will never need to worry about where our next meal is coming from. So by a little suffering early, we will avoid a lot of suffering later.

Scott RandallTuesday, December 30, 2014 at 11:18 am

I really enjoy reading about life experiences from everyone. I feel so fortunate to have been raised in a financially conservative, responsible, saving family. My parents always saved for retirement and lived slightly beneath their means and still do. Needless to say they are enjoying retirement! Their example made sense to me, I started saving for retirement at 22yrs old, am 45 now and in good shape. I can feel the pain of those who have suffered the losses of divorce as I also am 5yrs removed from that tragedy. It was very costly in every way as we had been together since highschool. I quickly got back up and started rebuilding which has been a win win (financially and emotionally). I try to look at obstacles as opportunities to build character and strength!
A few rules I live by– I live way below my means, I keep my emotions about spending in control 100% of the time- it’s called discipline, borrow money only if there’s no other way and attack that debt with conviction, work until your exhausted then take a deep breath and continue forward, no matter what find ways to spend less than you make always, teach your kids to work hard and save – this will save you tremendously in the long run as well as them, don’t envy the neighbors most of them are swimming in debt, and most importantly learn to enjoy this process because life is a journey not a destination. We should find happiness all along the way!
One last thing, the best investment you will ever make by far is the time you spend with your children. The returns are unmeasurable!

MarkTuesday, December 30, 2014 at 11:46 am

A lot of good stories here, This is mine. Very early in life, my wife and I both worked at a teamster distrubution warehouse. We both were both vested with a 50% teamster pension after 10 years. At the time, the pension and SSI was, enough to retire on when we turned 65, So I didn’t ever even think about it again, used my house as an ATM over and over again. Put 3 kids through college with parent student loans. Last house ATM move was at 55, (I’m 58 now), Parent student loans went to a 25 year plan just so I can afford to keep paying. When my father in law died we received 60k that went into an annunity. That my wife will be able to collect at 65. Also we both have very small 401 K’s with like 65 K between the 2 of us. A few very different income sources that should land us making about 10% less than we currently make, right now, however (she’s 4 years older than me) we got a few years left to keep saving. What I hope happens is when my pension kicks in at 65, I will use that to pay off a few of my parent student loans, so I might have less debt, and more cash. I guess I can’t receive SSI till 66 and 4 months now. So i advised my kids to save for retirement now Try to retire early, and 2 of the 3 are doing just that. I beleive upon retirement it would make more sence to pay down debt with any cash I got for tax reasons. (Lower taxes with less income) and less bills at the same time. This is very confusing, however if you have less income, you have less taxes, use your cash reserves to have less debt to pay. I live week to week on just paying my bills so my 401k doesen’t grow very fast. The very best investing ideas go not used. I might do one out of 30 or 50, and it’s usally a loser. Depending upon how hard it was pumped. However sometimes I make a few bucks. Never hit the big time, Yet, I keep trying.

linnTuesday, December 30, 2014 at 4:24 pm

I’ve been saving ion 401k for a long time, but had to roll it over into an IRA, new job and more going into my 401k but the main issue for not being able to invest a lot of money is where I live – Long Island NY – the cost of living is so high we live pay check to paycheck – so I am unable to save much extra money. With the politicians screwing us over financially regarding social security and the US gov dept going so high – they should have to put their money in 401k too – not get a pension that we have to pay for. Hope to win the lottery so I can retire in a great way (ha! ha!)

ThomasTuesday, December 30, 2014 at 4:56 pm

I am 61. Been married for 42 years to the same wonderful woman. She has not worked at a paying job for the last 15 years.
I have put 10 % into my 401k since I started working 40 years ago. Starting 4 years ago my company stop matching contributions in the 401k . So I now put the 10% into a Roth IRA.
We also own rental properties with very little debt and what we have will be paid off when I am 65 as I plan on working until age 66.
I was advised at an early age by a Christian mentor to pay my Lord a tithe first, then pay myself retirement funds of 10% and save 5% for emergency fund until I had 3-6 months living expense. At that point save to pay cash for car and other big ticket items and pay house off early. We buy 3 year old lease cars and keep 7-10 years and have our house paid off.
This plan has worked well for us and allowed my wife not to have to work when our son had a brain tumor when he was in college ( he is doing fine now ) . She has not worked since and given her time to our church her parents and now our grandchildren.
I lost my job at age 40 and was out of work for 9 months. Our reserve fund was there to help us get thru this period of unemployment.
I am thankful I was given this advice early on in my working career and also glad I acted on it.

HopeTuesday, December 30, 2014 at 6:11 pm

Start small and let it grow – my husband puts away 12% of his gross pay into his 401 k and I contribute 8%. I also save 4% for our raining day fund & other investments. We both started saving for retirement / raining day fund, 15+ years ago. We started by contributing 5% of our pay. Each year we received a raise, we increased our retirement contribution / savings by 1%. In some years our raise would be 3 or 4%. We never missed the money and the tax savings is great. Sometimes the hardest part is getting started but the sooner you start the longer you money has to grow.

b simpsonTuesday, December 30, 2014 at 7:39 pm

Beginning at a young age my parents stressed saving for the future. Not fond of the stock market investments in hard assets were stressed and I worked with them in purchasing assets such as farm land that gave us income in the present and huge increases in asset prices which I now have turned to cash because in the area of the country I am in those hard assets will have a hard time rising a lot further during my remaining lifetime. Now it is virtually impossible for anyone to get a return on money thanks to the federal reserve money printing scenario I am having to be careful not to go through principle especially since I am very adverse to the huge amount of risk that currently lies in the markets. From my view point I think the 20 and 30 year olds are going to have a very hard time developing any wealth until we have a strong market correction, a write down in debt, and a basic starting over in our financial systems. My advice to the younger set is work and save and pay cash for any and everything they can until these markets correct.

TonyTuesday, December 30, 2014 at 7:45 pm

In college I watched roommates fathers in corporate America get terminated to avoid pension liabilities. I figured I would have to make my own retirement not knowing I could jump into government and get paid for life. My background is agriculture and I own several businesses. In my retirement I only buy income producing properties, farms or rentals in town. The income pays debt and allows my family to live well. I lost a lot of money in the dot com days. I have managed to recoup a lot by following the advise given in these writings. I am currently on the side with a lot of cash waiting for the current bubbles to burst. I took all extra cash and bought gold, silver, plutonium and platinum, of course the values have dropped but the physical metal does not go away. When better values days come it will be sold for a nice profit. The challenge was believing I could do it. It worked

LynnTuesday, December 30, 2014 at 8:32 pm

I worked 3 part-time jobs in addition to my full time job (+overtime), and saved all of the
part-time jobs and I invested in the stock market starting in 1957 in dividend paying stocks
only, minimum 5% dividend, product and/or service that was needed for a long time, also
must not have cut dividends, normally want increases, FGP is an exception, I advise many
people coast to coast for free because I am not a licensed broker. I retired at 44 (29) years
ago and enjoy a 6 figure income as do my kids who are in their 40’s and retired also.

NancyWednesday, December 31, 2014 at 8:10 pm

Way to go Lynn!!

FredTuesday, December 30, 2014 at 8:38 pm

Gubmint needs to SIMPLIFY all the retirement stuff….ie, he amount you can put into all the programs should be the same whether it is a SEP, IRA, 401, 403 or whatever.

MarkWednesday, December 31, 2014 at 1:17 pm

Thanks for the opportunity to respond. Retirement is surely a loaded topic. My wife and I fall into the group that started “late”. With the downturn in 2008, we lost about 20% of our retirement savings and then decided to focus on paying down all debts and getting debt free. At this time, we have no debt and a fully paid off home where we plan to retire in. We’re playing catch up where we annually max out our 401k contributions (including catch-up contributions). We also contribute to our Roth IRA’s to the extent possible. At this point, we’re above the magical 250k amount but I don’t really feel that this number is realistic so I feel I have a long way to go. As for Social Security, while on paper we have a fair amount to come to us on a monthly basis, I just don’t have the confidence that in 12 years when I’m ready to retire it will be there. Would love to hear others feedback here and get a better sense of how the 250k was derived as again, I feel that this number should be much higher. Happy New Year to everyone!

DaveSaturday, January 3, 2015 at 12:21 am

My wife and I made commitments to raise our three daughters. She stayed home. I was a teacher for a long time. I took a second job working as a banker. We scrimped and saved. We watched our pennies and didn’t get into debt. Before I retied I paid off the mortgage.
The kids got scholarships that helped them with college and they came home and paid off their debt, about a year’s worth, saved a little and moved out. We paid for for the weddings and they were nice, but not over the top.

So we got to our mid-50’s and guess what? My wife came down wife cancer and we had some serious medical expenses. And we got that darn Obamacare hitting us pretty hard.
So all you folks that say plan, the jokes on you.

My advice is put away some bucks early and let it grow. Add to it when you get a raise. Make sure you save the entire $18,000 in your 401k if you can. invest in some gold and in some real estate. But my best advice is marry a damn good spouse! He or she is your best investment! There is nothing better than a person who adds value to your life!